BERLIN (dpa-AFX) - At the beginning of the year, Hellofresh compensated for the continuing sluggish demand for cooking boxes with its range of ready meals. "Sales from ready meals already account for a quarter of consolidated sales and we expect this share to increase further in the future," said CEO Dominik Richter in a statement on Thursday. The Berlin-based MDax group now also offers its ready meals in Sweden and Denmark. Investors were impressed by the figures.

The Hellofresh share rose by around two percent around midday. However, this is just a drop in the ocean after the share price collapsed at the beginning of March. Since the turn of the year, the share price has lost a good half of its value and has fallen by almost 90 percent in three years. The reason for the slump in March was that the management announced a fall in profits and at the same time withdrew its medium-term targets. Analysts then criticized the management team for its questionable communication and warned that a great deal of trust had been lost.

Since then, CEO Richter and his CFO Christian Gärtner have been striving for more transparency. Since Thursday, Hellofresh no longer reports any active customers, but it does show how much turnover the two major divisions generate with cooking boxes and ready meals.

The managers are relying on the success of pre-cooked meals in particular: according to earlier figures, sales of ready meals are set to increase by around 50 percent this year. In its largest single market, the USA, Hellofresh claims 74 percent of the ready-to-eat market with its Factor brand.

While sales of ready meals increased significantly in the first quarter, Hellofresh continues to look for answers to the weakness in the cooking box business - the products that have allowed the Group to grow, especially during the coronavirus pandemic. However, consumers have recently been less convinced by the packages with pre-portioned ingredients and recipes.

Between January and March, Group sales increased by 2.9% to around 2.07 billion euros, which was roughly in line with expectations. Adjusted for currency effects, the increase was even greater. However, Hellofresh surprised with its operating result (EBITDA) adjusted for special effects: earnings before interest, taxes, depreciation and amortization fell by almost 75 percent to 16.8 million, mainly due to high costs for marketing and production start-ups. However, this was still significantly more than analysts had feared. On balance, the loss in the first quarter increased from 25.4 to 83.8 million euros.

In a conference call with analysts, the Management Board signaled that sales in the second quarter are likely to grow less strongly than in the previous quarter. Adjusted for special effects, earnings before interest, taxes, depreciation and amortization (EBITDA) are likely to be around 5.5 to 7 percent of revenue, which was mainly due to advertising expenditure to acquire new customers.

For JPMorgan analyst Marcus Diebel, Hellofresh would then have to make significant gains in the second half of the year in order to even reach the target of adjusted operating profit. "Given management's rather poor track record of providing realistic guidance over the past twelve months, we expect investors to pay less attention to the commentary at this point," he commented./ngu/lew/jha/